Embraer CEO Frederico Curado stated the manufacturer will wait until Boeing makes a decision on where it is going with its narrowbody programme before the company makes a decision on future commercial aircraft development (Forbes, 25-Mar-2011). Embraer is considering moving into the 115 to 140-seat segment or revamping its existing 70-110 seat regional jet product.
Embraer waits to see where Boeing heads with narrobody
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Southwest Airlines and jetBlue take different paths to sustaining balance sheet strength
At nearly 46 years old and 17 years old, respectively, Southwest and jetBlue approach their financial priorities differently. jetBlue is in the process of buying a certain level of aircraft off lease to reduce debt and raise its levels of unencumbered aircraft. Southwest is concluding a hefty investment in a long overdue overhaul of its reservations system and making other significant technology investments.
Each airline also has a different capital allocation strategy. Southwest has engaged in some level of shareholder returns since the 1990s, whereas jetBlue’s shareholder return strategy is just starting to take shape – the airline is reaching a point in its leverage performance where it can contemplate more meaningful levels of shareholder returns in the medium term.
One area where Southwest and jetBlue hold similar visions is balance sheet strength, and the airlines have similar leverage goals: to support capex commitments, maintain manageable debt levels, and expand or sustain return to shareholders.
Virgin America acquisition gives Alaska the arsenal to up the stakes against United in SFO
One of the main drivers in Alaska’s pursuit of, and eventual acquisition of, Virgin America was strategically to bolster its position on the US west coast. Alaska is now leveraging its newly strengthened position in San Francisco to broaden its combined reach from the city with Virgin America, adding 12 new destinations from the airport by YE2017.
Alaska is upping competition with San Francisco’s largest airline, United, through its expansion at the airport, breaking United’s monopoly in many of its new planned routes. The growth shows that combined, Alaska and Virgin America are in a much stronger position to challenge United than Virgin America on a stand alone basis.
The new routes offered by Alaska are a mix of small and medium sized markets utilising Alaska’s growing fleet of Embraer 175s and Virgin America’s Airbus A320 family aircraft. Alaska’s new route profile from the airport illustrates the combined airline’s ability to offer more network breadth from San Francisco – through a more diverse fleet that should generate a larger pool of revenue for the company.